I don't benchmark my portfolio against DJ, S&P or Nasdaq. I will use those numbers as market direction indicators. Don't fight the market. I do track, in a spreadsheet, the S&P 500 Index and calculate and graph Fibonacci S2/R2 numbers as a measure of volitlity. It is an interesting spreadsheet exercise, using the GoogleFinance() function. Keeps my mind cooking.

Bench marking an individual security is simple enough--fund performance can be compared with an index. ... Some in this camp said they believe that bench-marking against a traditional market index encourages short-term thinking and possibly even too much trading.

You need to find an index which reflects your portfolio - no point comparing smaller company investments against the main index for example. However, it is important that you do benchmark your performance so you can tell how you are doing.